How do we ensure fair prices for farmers and consumers while building climate resilience, protecting the environment and sustaining rural communities? And what happens when Farm Bill policies incentivize the opposite approach? Hear from IATP’s Ben Lilliston and Karen Hansen-Kuhn in Episode One of the Farm Bill Uprooted, which dives into Farm Bill basics, and how it has shaped a food and farm system dominated by commodity production and overgrown corporate agribusiness interests.
Enjoying the series? Find Episode Two here.
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References and further reading
Transcript
00:00:00 Ben Lilliston
Farm Bill is largely a spending bill, and it's about where are we going to spend? What are we going to set priorities for, how we're going to spend public money, and that's how we've seen a lot of our system grow is you have the public spending incentivizing 1 system of production and then we have a regulatory system that is just giving exemption after exemption for large scale agriculture. Right? We're not going to hold you up to clean water standards. We're not going to hold you up to clean air standards. We're not going to regulate your greenhouse gas emissions. We're not going to really enforce antitrust laws. So, you put all those pieces together and that's where we are. It's not a pretty picture.
00:00:42 Lilly Richard
That seems really bad!
00:00:44 Ben
It sounds really bad! Maybe that should be the theme of this — that should be the name of this podcast: “That sounds really bad.”
00:01:03 Lilly
From the Institute for Agriculture and Trade Policy, I'm Lilly Richard, and this is part one of a six-part podcast series: The Farm Bill Uprooted. Over the course of this series, I'll speak with researchers, advocates and farmers from inside and outside IATP about how the Farm Bill works and how past Farm Bills have dealt with or played a role in creating the problems we see with the food system today, and how we can start to try to fix them.
00:01:43 Lilly
Every five years, Congress comes together to pass a huge omnibus spending bill known as the Farm Bill, that helps set the course for our food and agriculture system in the U.S. 2023 is one of those Farm Bill years. The current bill, passed in 2018, expires at the end of September unless Congress passes an extension. The bill itself is hundreds of pages long, and it's divided into Titles, or sections, that connect to different government funded programs aimed at farmers, institutions and everyday people. The biggest piece is the nutrition title, which covers the Supplemental Nutrition Assistance Program, or SNAP, and accounts for 76% of Farm Bill spending. Other major titles include crop insurance, commodities and conservation. And I know this all sounds pretty dry, but the way these different programs are designed and funded can play a huge role in shaping what our food system looks like.
00:02:44 Lilly
So, let's talk about the food system. When you look at the U.S. food and farming system as it stands right now, some pretty big problems become apparent. On the one hand, almost 19 million Americans live in food deserts with no access to fresh, healthy food, and 34 million are considered food insecure, struggling to afford food, whether or not they live close to a grocery store. And with food costs rising, so are the number of hungry, food insecure people in this country. And yet the price of most of our food and other agricultural products doesn't really reflect the true cost of producing it. Not only are market prices for main commodity crops like corn, wheat and rice often less than the cost of production, but supermarket prices don't even incorporate things like the worker exploitation and climate and environmental harms caused by large scale industrial farming and processing. These costs get externalized, in other words, dumped on those who weren't responsible for them. But those costs are piling up.
00:03:53 Lilly
About half of the water in the U.S. is too polluted for drinking, swimming or fishing, and industrial agriculture is the largest source of that pollution, as well as a leading factor in water shortages in the western part of the country. It's also a major culprit driving the climate crisis and the extinction of large swaths of Earth's diverse plant and animal species, and it’s a rigid input dependent, homogeneous system that itself is particularly vulnerable to the impacts of these crises, like supply chain disruptions, droughts and floods. It's not working for rural communities or farmers either, except for the very largest producers. The challenges of our food system are huge, systemic and interconnected, which is why the idea of creating one big comprehensive set of policies and programs to deal with them simultaneously seems to make sense. And the Farm Bill does fund some really important programs that support things like food assistance, local food systems, rural development, renewable energy, soil health and biodiversity. So what's not working? And how did we get here?
00:05:07 Lilly
So would you like to introduce yourself?
00:05:11 Ben
My name is Ben Lilliston. I'm the director of Climate and rural strategies at the Institute for Agriculture and Trade Policy. I also have a small farm outside of Minneapolis. And I have used Farm Bill programs there, in order to help put in fencing for our sheep. And I've worked on the Farm Bill on and off probably for more than 20 years in different capacities.
00:05:43 Lilly
I talked to Ben about the history of the Farm Bill, broadly, how it worked originally, and how that's changed over the years, in large part due to the influence of big corporate agribusiness interests. The first Farm Bill was part of a slate of New Deal programs created in the 1930s to deal with the dual economic and environmental crises of the Dust Bowl and the Great Depression. At the time, one in four Americans still lived on farms. As part of the colonization of the continent, European American settlers had been encouraged by the Homestead Act of 1862 to claim land and begin farming it, and by the turn of the century, much of what had once been forest, grasslands or deep-rooted prairie, inhabited and managed by different indigenous tribes, had been seized and converted to privately owned agricultural land. The land was being farmed very intensively, especially with the advent of new industrial technologies like tractors and synthetic fertilizer, producing an oversupply of crops that caused market prices to drop and creating an environmental disaster that was exacerbated by a multiyear drought.
00:06:57 Ben
So the Farm Bill, as we currently kind of know it, was really launched during the Depression in the 1930s and it was set up to deal with a couple of things that were happening at that time. One is sort of the long-standing challenge of ensuring that farmers are paid fairly in a marketplace. When you have so many different farmers out there, they're not really able to coordinate and negotiate on price together generally and they don't really have a good sense of what the supply is supply and demand and just basic economics. I think that's something that a lot of people don't understand. Farmers do not have a say in how much they're going to get paid for their bushel of corn or wheat or soybeans and so forth. They take what the market gives them. And because there are so many farmers, they also don't really have control over supply, so they can't say, well, we need to scale back. Well, an individual farmer could do that, but collectively they can't. And so they routinely are encouraged to over produce and then just from an individual farmer standpoint, when you're kind of on the edge. In some cases, living year to year, it's really in your interest to produce in that individual year as much as you possibly can. So this is like a fundamental problem in agriculture and farming. So that was one issue.
00:08:18 Ben
Another issue was some of the environmental challenges around The Dust Bowl. And understanding that we needed to address conservation at some level and soil. Another question was how do we ensure food security for the country during the Depression so we have enough food? So that's kind of like the beginning of a lot of the farm programs.
00:08:38 Ben
And one of the pillars of those programs was a system of supply management and reserves. And that was very controversial at the time and faced some legal challenges, but eventually kind of got through. And basically the idea was we're going to set some baseline prices for what farmers get paid. If we have too much supply on the market and the price drops below this baseline price, then we're going to put it into reserve. We're going — the government will purchase that, put it into reserve and then if the price rises above a certain amount — so basically creating price bands — we will release it onto the market. So the idea was it would ensure a fair price for farmers but, and also ensure that prices don't skyrocket for consumers.
00:09:27 Lilly
The supply management program alongside soil conservation programs established as part of the First Farm Bill, helped to stabilize the market and addressed some of the issues with the agriculture system at the time. But they also reinforced the racial inequality of the existing system. Higher commodity prices and payments for taking some land out of production benefited landowners, who were mostly white, but a provision extending payments to tenant farmers or sharecroppers was removed from the final bill.
00:09:59 Ben
I think there are some real benefits to that early system. But it didn't work perfectly and so that program really worked for farmers who owned land. So it definitely benefited primarily white farmers. So farmers of color really struggled to get involved in that program. And that has to do with historical racial discrimination at the USDA all the way down to their county level offices and goes beyond just, you know, the commodity programs; it goes to all programs. But that's kind of important to acknowledge that that type of program needs to be, if it was to be reintroduced, more accessible for all farmers. And I think we need to think broader. About how to encourage climate resilience as participating in that program. So how can you diversify your cropping system and still be rewarded within a supply management system? I think it's the issue of having reserves is really something that we should be thinking about from a climate resilience standpoint. We're seeing a serious drought that has affected much of the country and affected production, and we should be thinking about how systems of reserves can work when we have really good years, years of abundance, to ensure farmers get paid more fairly, but how can we also have it when there's years of scarcity and we don't see skyrocketing prices for consumers?
00:11:29 Lilly
When Ben says reintroduced, it's because the supply management and reserve programs don't really exist anymore. Over the years, in different iterations of the Farm Bill, programs were changed, removed and added, for better or for worse. The food stamp program, which later became SNAP, was added to the Farm Bill in the 1960s, putting it under USDA authority and tying together the interests of eaters with those of producers. Conservation programs were removed and later added back in, along with programs for research, forestry, energy and many other things. But the question of how to handle commodities, which are mostly storable, crops like corn and wheat, rice and cotton, and support the financial viability of farmers continue to be a challenge. While the early Farm Bills had used price supports, reserves and limits on supply, later versions of the commodity title began to take the opposite.
00:12:31 Ben
Over time and ensuing Farm Bills, of course, you can imagine that many of the food companies, particularly the global grain companies, did not like this program. And so they slowly took shots at it, slowly eroded it over time. And IATP's founder Mark Ritchie wrote kind of a seminal piece about these efforts called Crisis by Design, describing how the industry lobbied Congress over and over. And one of their basic arguments was that these types of programs are limiting our ability to take export markets, to grab markets in other countries, and if we produce more, we can control those markets and prices will rise for farmers and we won't need this kind of supply system, so different parts of that program was eroded. As I said, gradually and finally fully eliminated in the 1996 Farm Bill. And by that point it wasn't really working very well. When you start to mess with what is the fair price, what is the price bands, where should they be? And then you start to reduce the reserves amount so you sort of start to basically remove government intervention over time into the marketplace and start to substitute it with a subsidy-based system where if prices drop, the government will pay farmers a subsidy to keep farming. And so that was a big kind of final shift in the 1996 Farm Bill, which was called “Freedom to Farm.”
00:14:08 Ben
And then we went whole hog into subsidy payments. And that was also a time when the U.S. entered the World Trade Organization in 1995 and then NAFTA was passed in 1994. So all these three things kind of happened at the same time. And so you have these free trade agreements where we're really trying to assert ourselves, the U.S. is, in international trade and markets around the world, and then you're finally eliminating any kind of restrictions on how much farmers can grow. And so we produced a lot, prices dropped almost immediately, and then we started to payout record subsidies, and have basically done that ever since, in different forms, those subsidies have taken. First, they were direct payments, just like you know, “Here's a direct payment, cause the price has dropped.” They had set up counter cyclical payments, which are payments that vary based on what the market price is. Then they shifted towards a more of an insurance type of model, which is where we are now; a revenue insurance kind of system. And so when the government stepped back and stopped intervening in the marketplace for these big commodity crops in the same way, of course, it advantages the big grain companies that are buying these crops, they're getting them cheaper and cheaper. They're the ones who manage the supply. They control the market in a different way. And that's where we are now.
00:15:39 Lilly
All that excess commodity production for the most part, it isn't going toward feeding Americans. But it's not exactly “feeding the world” either. It's going toward animal feed, ethanol and exports. According to the USDA, over 60% of food grains produced in the U.S. get exported. But that's not necessarily great news for our trade partners either, as cheap imports from the U.S. can weaken local food systems and economies and create import dependence. I talked to Karen Hansen-Kuhn, director of trade and international strategies at IATP, about the Trade Title of the Farm Bill, and about the larger impacts of the U.S. flooding international markets with all those cheap commodities.
00:16:26 Karen Hansen-Kuhn
Well, comparatively speaking, the Trade Title’s fairly small, but it includes programs that are designed to bolster export markets for agricultural goods. So both smoothing out impediments, doing sort of market development in other countries and then a a bigger program on international food aid. So if we zoom way out and we think about the way these programs evolved historically, there was this massive overproduction, generated by a number of incentives in Farm Bill and other programs, and this notion that farmers should get big or get out, and so even when prices would drop really low, they were encouraged to keep producing as much as they could. So there's this massive overproduction; now, some of that went for food aid. But a lot of it meant they just there was this imperative to sell those products on other markets.
00:17:19 Karen
Now of course, we're always going to be exporting some agricultural goods. We have very productive land. We have farmers that can produce well, but this was beyond what was rational. IATP has been calculating the extent of “dumping” for a long time, and that is: we can look at what the cost of production is, something for transportation, something about the subsidies, and compare those costs of production with the export price. And what we found is, in many years the U.S. was actually exporting these goods at below the cost of production. So the most recent year we have for corn, for example, we exported corn at 10% below the cost of production. So often countries receiving these massive exports can't compete. The clearest example we have is Mexico, after NAFTA. After NAFTA, U.S. corn exports to Mexico increased 400% in the first few years. A lot of this was this foreign exported at below the cost of production. And in the first, I think it was the first 10 years, more than two million Mexican farmers were pushed out of agriculture. 2,000,000 were pushed out of agriculture because they simply couldn't compete. So I think there's less dramatic examples in other places, but it's a persistent problem that has been an issue in WTO talks and every time the U.S. enters into trade talks.
00:18:46 Lilly
So how does the Farm Bill reinforce this system of overproduction? And why? Here's Ben again.
00:18:53 Ben
Farm Bill has a very significant impact on what our farming systems look like in the United States. A number of the programs really help farmers manage risk and encourage commodity crops. So the reason that we have so much corn and soybeans and wheat and rice and cotton has a lot to do with the fact that our farm programs help farmers who grow those crops. If the price drops, they're helped and covered through farm programs. If they're hit by a natural disaster, they're covered through insurance programs. It's easier for them to get credit if they're growing those crops. There's just a series of incentives. And now, as we've seen more and more of that commodity crop production out there and land consolidation, it just makes it harder for farmers who are interested in growing in a different way, and different types of crops, or different types of farming that is more diverse includes multiple crops or includes livestock. They're not supported in the same way through farm programs, as if you're just growing corn. It's not a level playing field out there and so that really dictates a lot of the decision making for individual farmers and really dictates how much of our land farmland is managed.
00:20:15 Ben
Well, you can see that a number of large agribusiness firms really benefit from the system and it plays out in multiple ways. One, they're getting massive production of commodity crops that they can then use however they wish. They can use it for just selling the commodity crop in its original form, but they can also do what they call “value added,” so they can create high fructose corn syrup. They can sell it for ethanol or biofuels. In some cases they can sell it for animal feed, and so the grain companies definitely benefit.
00:20:52 Ben
But one of the biggest beneficiaries has also been the meat industry. We've seen this transition towards large scale concentrated animal feeding operations called CAFOs, or we would call them factory farms, starting in the 80s but really accelerating in the 90s, again, once the Freedom to Farm Bill was passed and farmers just started planting more and more, flooded the market, lowered the price. Cheap animal feed, cheap feed is critical to the whole CAFO model. That model doesn't work as well if farmers are paid fairly for their commodity crops, but if they're paid below cost it basically acts as a subsidy to these large meat companies. So JBS and Smithfield and Tyson Cargill, who both produces grain animal feed and produces beef. They benefit from that whole system.
00:21:46 Ben
And I think you know who's paid the price has really been rural communities, in multiple ways. I mean, we've seen a massive loss of farmers. You know, IATP was formed in the 1980s during the farm crisis when you just were seeing hundreds of thousands of farmers pushed out, filing for bankruptcy, could not survive. And that was as the farm programs were just falling apart and not really serving their purpose. And right now we're in a situation where some of the farms who have survived are just big, and continuing to try to get bigger in order to keep going. And so farmland consolidation means fewer people living in rural communities. There's fewer farmers there. Most of the farm related businesses are now controlled by outside companies, they may be even global companies, so you don't have your local business where the money is being recirculated in the community. It's being extracted. Natural resources being extracted, whether it's corn or soybeans or or whatever, and then the money is being extracted, any profit that's being made is being extracted from those communities. And then of course you have the extensive pollution that has resulted from this system, massive water pollution.
00:23:07 Ben
There are rural areas right now where people can't drink the water and then you have air pollution also associated with certain parts of the country. So these are, you know, some of the outcomes. And then as I mentioned, you have land consolidation, it really reduces opportunity for new and beginning farmers to be able to enter the marketplace. They almost have to be huge in order to be able to survive economically. And that's a result of our Farm Bills. I mean, really, that's one part of it.
00:23:37 Ben
Farm Bill is largely a spending bill, and it's about where are we going to spend; what are we going to set priorities for how we're going to spend public money? It does not generally include regulatory aspects, and that's how we've seen a lot of our system grow is you have the public spending incentivizing 1 system of production and then we have a regulatory system that is just giving exemption after exemption for large scale agriculture; we're not going to hold you up to clean water standards, we're not going to hold you up to clean air standards. We're not going to regulate your greenhouse gas emissions. We're not going to really enforce antitrust laws. We're not going to scrutinize mergers that have really led to, you know, four companies controlling 80% of the beef market and the concentration in the seed industry and the hog industry and the grain industry. And nothing was done overtime to really deal with that. So and it makes it very again very hard for new entry and new companies to enter into that marketplace. So you put all those pieces together and that's where we are. It's not a pretty picture.
00:24:47 Lilly
So that's where we're starting from. But it's not the end of the story. For decades, the corporate food and Agri business lobby was the loudest voice influencing Farm Bill policy and helping set the agenda behind closed doors away from the public. They helped create a system that reinforces their market power and incentivizes a destructive system of monoculture industrial overproduction that the rest of us are paying the price for. But in recent years, more and more individuals and organizations who care about food systems, the environment and social justice have been paying attention, organizing and engaging in the Farm Bill legislative process — the one that's going on right now — and letting their senators and representatives know that this system isn't working for us. That includes farmers who are trying to do something different trying to farm in ways that are more diverse, more resilient, more sustainable, and who face an uphill battle with the way that Farm Bill programs are currently structured and administered. Over the next few episodes, I'll be diving deeper into the problems with our food system and speaking with some of those experts and advocates about how specific parts of the Farm Bill address those problems, or don't, the impact they have on rural communities, farmers of color, the environment, and how we can create a better Farm Bill.
00:26:33 Lilly
If you enjoyed this podcast, please remember to subscribe and rate us on your preferred podcast platform and share the show with your friends. You can also check out our previous podcast series Uprooted: Talking COP27 in the same feed. The Institute for Agriculture and Trade Policy works at the intersection of policy and practice to advance just sustainable food systems. You can support our work at IATP.org/donate.
